BUSINESS, INNOVATION AND SKILLS

EU Trade Foreign Affairs Council (Post-Council Statement)

Edward Davey: I represented the UK at the trade session of the above Foreign Affairs Council in Geneva, Switzerland, on 14 December.
	Trade Ministers met immediately before the eighth World Trade Organisation (WTO) ministerial conference to take a number of decisions related to the conference, notably the accessions of Russia and Samoa to the WTO and the least developed countries services waiver, as well as to approve the mandates for deep and comprehensive free trade agreements (DCFTAs) with Egypt, Jordan, Morocco, and Tunisia.
	The main items for discussion were the position to be taken by the European Union on the Doha development agenda (DDA), the future path of the WTO and the negotiations on the revision to the Government procurement agreement (GPA). There was broad agreement on the former, in particular the importance of messages on resisting protectionism, on strengthening the WTO and maintaining its relevance for tackling 21st century issues, and on the need for an active negotiating agenda in order to deliver “early harvests” of those areas that were most advanced in the DDA such as trade facilitation.
	The UK, supported by the majority of member states, called for the EU to conclude the 10-year long process of reviewing the Government procurement agreement. I argued that a successful deal would pave the way for the opening of negotiations with China on its possible future accession to the GPA. I also stressed the value of obtaining a business-friendly deal at such a critical moment for the EU and the WTO.
	Subsequent to the trade FAC, I represented the UK at the World Trade Organisation’s eighth ministerial conference (MC8) in Geneva from 15 to 17 December.
	The conference agreed to Russia’s accession to the WTO after an 18-year negotiation. Agreement was also given to accession by Samoa and Montenegro. All will become members of the WTO during 2012 when domestic ratification is complete. With the approval of the accession of Vanuatu earlier this year, this will take the WTO’s membership from 153 to 157. Samoa and Vanuatu are the first least developed countries (LDCs) to join since 2004.
	The conference also agreed a waiver from WTO rules to allow preferential market access to LDC providers of services, extended the deadline for LDCs to bring in rules to protect intellectual property, and agreed provisions aimed at speeding up LDCs’ membership negotiations. Members also reaffirmed their commitment to working
	towards the implementation of promises on duty free quota free access (DFQF) and cotton, first made at MC6 in Hong Kong in 2005.
	Finally, the 42 signatories to the Government procurement agreement (a plurilateral agreement within the WTO framework allowing access to each others’ procurement market) agreed, after 10 years of negotiation, a revision to the Agreement. The deal expanded market access within the signatories, including, for the EU, access to €100 billion-worth of PFI contracts related to reconstruction in Japan.
	On the Doha development agenda negotiations the agreed chair’s summary noted that negotiations were at an “impasse”, that members had “significantly different perspectives”, and that it was
	“unlikely that all elements could be concluded simultaneously in the near future.”
	Despite this, Ministers remained committed to further work, to the need
	“to more fully explore different negotiating approaches”,
	and to advancing negotiations to allow
	“Members to reach provisional or definitive agreements based on consensus earlier than the full conclusion of the single undertaking”
	(i.e. “early harvests”).
	Finally, the conference agreed to
	“intensify their efforts to look into ways that may allow Members to overcome the most critical and fundamental stalemates in the areas where multilateral convergence has proven to be especially challenging”.

Skills Funding and the Skills Funding Agency (Chief Executive)

John Hayes: Further to my announcement on 1 November, I would inform Parliament about the outcome of the review into the status of the chief executive of skills funding and the Skills Funding Agency.
	The review has concluded that the existing arrangement of a statutory post holder should be replaced with a more traditional Executive agency model. This is consistent with the Government’s wider commitment to improve radically the transparency and accountability for all public services, providing clarity and focus to the work of the agency and ensuring that skills and apprenticeship programmes are delivered within an overarching strategic framework set by Government.
	The Skills Funding Agency will continue to play a vital role in funding the education and skills training that our country needs to tackle the very real challenges that lie ahead; and the outcome of this review reflects the Government’s ongoing commitment to building on the strength of the further education system, while ensuring rigorous accountability structures are in place.
	I can confirm that both the Skills Funding Agency and wider stakeholders have been fully engaged in the review process, and I will be writing to them today about the outcome of this work.
	We will bring forward legislation for this change as and when parliamentary time allows.

TREASURY

ECOFIN

George Osborne: The Economic and Financial Affairs Council was held in Brussels on 30 November 2011. The following items were discussed:
	Breakfast:  debrief from Eurog roup meeting of 29 November and discussion of the economic situation
	Council heard that Eurogroup had agreed the sixth tranche of funding for Greece under its assistance package. It also received an update on the options for leveraging the European financial stability facility. Council then discussed bank capital and funding, following up on the European Council of 26 October, and agreed that capital requirements needed to be met without deleveraging, I made it clear that if required, funding schemes needed to be at national level. This was agreed. I also called for early discussion of progress on the capital requirements directive.
	Follow-up to the G20 Summit of 3-4 November in Cannes
	France provided a debrief of the summit. They confirmed that the major topic of discussion had been the euro area crisis and that the EU had been urged to agree a comprehensive approach to the crisis. They also noted that the summit had discussed ways of increasing IMF resources.
	Annual Growth Survey (AGS)
	The Commission presented its second annual growth survey and set out five key priorities: fiscal consolidation (while taking account of the need for growth and for differentiation between member states); restoring normal lending conditions, with particular attention to SMEs; completing the single market; reforms to modernise labour resources (in particular ensuring wages better reflect productivity, improving labour mobility, and addressing youth unemployment); and efficient public administration.
	Second economic governance package
	The Commission presented two legislative proposals and a discussion paper. The first of the legislative proposals relates to strengthening budgetary surveillance within the euro area, particularly for member states in excessive deficit. It would require euro area member states to submit their draft national budgets to the Council and the Commission by 15 October of the preceding year for assessment. The second proposal is a draft regulation on the surveillance of euro area member states experiencing severe financial disturbance. It set out a process of more comprehensive monitoring for member states receiving a programme of financial assistance from EU and IMF-backed funds. Such monitoring could also be applied to member states not receiving assistance but considered to be at risk.
	The Commission discussion paper proposed three options for stability bonds: full substitution of national issuance by stability bonds with joint and several guarantees; partial substitution of national issuance with joint and several guarantees; or partial substitution of national issuance with several but not joint guarantees. The Commission noted that stability bonds would create a deepening of economic and monetary union and this
	would need to be accompanied by parallel measures to strengthen economic governance. Some options would also require treaty change. The Commission said that it would prepare further steps on euro area economic governance by the end of 2011.
	There was no substantive debate, particularly not on stability bonds, but a number of member states expressed support for the general principle of further strengthening euro area economic governance.
	Recommendation on a nomination to the executive board of the European Central Bank
	This was added to the agenda as a result of discussion over breakfast. Council adopted a recommendation on the nomination of Benoît Coeuré of France, to replace Lorenzo Bini Smaghi of Italy, who has announced his resignation.
	Economic and financial impact of EU legislation
	Council discussed conclusions addressing the need for impact assessments of proposed EU legislation, and for all such legislation to take account of the need to ensure sustainable public finances and create jobs and growth. The UK intervened to support the conclusions. After much discussion conclusions were agreed with a number of amendments.
	Court of Auditors’  2010 Report on the EU Accounts
	The President of the Court of Auditors presented its report. In the auditors’ view, the budget presents fairly the position and cash flow of the EU, although there remains scope for improvement. Control systems are only partially effective and overall there has been an increase in the level of errors. The Commission highlighted that the report showed progress had been made. The UK, the Netherlands and Sweden all expressed concern at the increased error rate. The presidency noted the report, which will be further considered by Council in February 2012, when Ministers will vote on discharge of the 2010 accounts.
	EU Statistics
	Council adopted conclusions welcoming the report of the European Statistical Governance Advisory Board and inviting the Commission to put forward proposals regarding the professional independence of national statistical authorities and EUROSTAT.
	Code of Conduct (business taxation)
	This item was withdrawn from the agenda by the presidency and is now expected to be considered by Council in January 2012.

CABINET OFFICE

Civil Service Pensions

Francis Maude: On 2 November the Chief Secretary to the Treasury made a statement to the House setting out an improved offer on public service pensions to public sector workers (Cm 8214). This offer provided a more generous cost ceiling for scheme-specific discussions to work within, and protected all those within 10 years of their pension age from any further change. This generous offer was conditional on the
	Government and trade unions reaching agreement by the end of the year, including in the principal civil service pension scheme, bringing to a conclusion talks that have lasted since February 2011.
	Since 2 November my officials and I have been engaged in detailed and intensive talks with the National Trade Union Committee for the civil service. I can now report to the House on the heads of agreement on the scheme design for the principal civil service pension scheme to be introduced in 2015, on which talks have concluded. The Government have made it clear this sets out their final position on the main elements of scheme design, which the FDA, Prospect, GMB Prison Governors Association and the Immigration Services Union have agreed to take to their Executives as the best that can be achieved through negotiations. There is a specific outstanding issue relating to mechanisms for prison officers to retire earlier than state pension age where we are continuing to have discussions with the Prison Officers Association. We will invite these unions to join us in further work on the remaining details in the new year, and their Executives will consult members as appropriate. The continued union engagement includes a commitment to suspend any further industrial action while the final details are resolved and unions are consulting their members.
	The core parameters of the new scheme are set out below:
	a. a pension scheme design based on career average;
	b. a provisional accrual rate of 2.28% (equivalent to 1/43.9) of pensionable earnings each year, subject to further agreement on final details.
	c. revaluation of active members’ benefits in line with CPI;
	d. a normal pension age equal to state pension age, which applies both to active members and deferred members (for new scheme service only);
	e. pensions in payment to increase in line with prices (currently CPI);
	f. benefits earned in deferment to increase in line with prices (currently CPI);
	g. average member contributions of 5.6%, with some protection for the lowest paid (the detailed structure of which is still to be agreed);
	h. optional lump sum commutation at a rate of 12:1, in accordance with HMRC limits and regulations;
	i. spouses/partner pension of three-eighths of pension, in line with the current open scheme ;
	j. lump sum on death in service of two-times salary;
	k. ill-health benefits in line with those in the current open scheme;
	l. actuarially fair early/late retirement factors on a cost-neutral basis; and,
	m. an employer contribution cap to provide backstop protection to the taxpayer against unforeseen costs and risks and allowance for an improvement in member benefits if the value of the scheme falls beyond a fixed level;
	n. the scheme will support the use of partial retirement and will follow the recommended approach set out in the Independent Public Service Pensions Commission final report of 10 March 2011 on abatement (details to be finalised); and
	o. a guarantee, outside of the scheme designs parameters set out above, of no further reform for the next 25 years.
	Transitional  a rrangements
	Scheme members who, as of 1 April 2012, have 10 years or less to their current pension age will see no change in when they can retire, nor any decrease in the
	amount of pension they receive at their current normal pension age. They will be allowed to remain members of their existing schemes up to and including the point at which they draw their pension rights and all current scheme rules will continue to apply.
	Members who are within a further 3.5 years outside this protected group will have an additional degree of protection, in the form of further accrual in their existing schemes. This protection will be tapered in a linear fashion depending on the age of the member.
	Areas for further detailed discussion
	Discussions with the trade unions identified above will continue early next year, to shape the remaining elements of the scheme design such as abatement, re-employment, treatment of re-joiners and public sector transfers and contribution rates structures including years 2 and 3 of the employee contribution increases. Any of these issues that affect the final cost of the scheme will need to be taken into account in the final rate of benefit accrual. The requirement to fit the new scheme within the revised cost ceiling for the reference scheme published on 2 November will remain, and agreement on these issues will also be subject to review by HM Treasury to agree the approach taken to risk management and impact on cash flows.
	The Government Actuary’s Department has confirmed that this scheme design does not exceed the cost ceiling set by the Government on 2 November. Copies of the heads of agreement and the scheme actuary’s verification have been deposited in the Libraries of both Houses.

COMMUNITIES AND LOCAL GOVERNMENT

Local Government Pension Scheme

Eric Pickles: On 2 November the Chief Secretary to the Treasury made a statement to the House setting out an improved offer on public service pensions to public sector workers (Cm 8214). This offer provided a more generous cost ceiling for scheme-specific discussions to work within, and protected all those within 10 years of their pension age from any further change. This generous offer was conditional on the Government and trade unions reaching agreement by the end of the year, including the local government pension scheme in England and Wales, bringing to a conclusion talks that have lasted since February 2011.
	Since 2 November, I have been engaged in talks with the local government trade unions and the Local Government Association (LGA) to enable purposeful discussions on local government pensions reform. I can now report to the House on the heads of agreement signed jointly by the local government trade unions and the LGA on the principles governing the scheme design, ongoing cost management and governance of the new scheme to be introduced in 2014. Further work on these agreed principles will commence in the new year under the supervision of a newly appointed project board representing key scheme partners. The Government have made it clear this sets out their final position on the main elements of scheme design, which unions have agreed to. This includes a commitment to suspend any further industrial action while the final details are resolved and unions are consulting their members.
	The core parameters of the agreed new scheme design are set out below:
	a. a single solution to both the short and long term issues by the early introduction of the new scheme in April 2014, with regulations in place by April 2013;
	b. the single solution to be built on the basis of career average earnings;
	c. can include zero increases in employee contributions for all, or the vast majority of members, provided that overall financial constraints set by the Government are met;
	d. some elements of choice to encourage retention of existing membership and encourage new membership; and
	e. flexible retirement age built around the scheme’s normal retirement age equal to the state pension age or age 65, whichever is later, and applies both to active members and deferred members (new scheme service only). If a member’s state pension age rises, then normal pension age will do so too for all post 2015 service.
	A copy of the heads of agreement has been placed in the Library of the House.

CULTURE MEDIA AND SPORT

Telecoms Council

Edward Vaizey: I represented the UK at the Telecoms Council in Brussels on 13 December 2011. The meeting was chaired by the Polish presidency.
	There were four substantive agenda items:
	1. Proposal for a Decision of the European Parliament and of the Council establishing the first Radio Spectrum Policy Programme (RSPP): Adoption of Council ’ s position at first reading. (EM 13872/10)
	This item was for member states to agree to a Council position to enable a First Reading deal to be reached with the European Parliament on the Commission’s proposed RSPP (EM 13872/10). The Council adopted this position without substantive comment.
	2. Proposal for Regulation of the European Parliament and of the Council on roaming on public mobil e networks within the community— Progress Report and Exchange of views (EM 12639/11 and EM 12666/11)
	This item was an exchange of views based around three questions on the above proposal as detailed in my pre-Council statement and was the only item that resulted in a round-table debate. I intervened as indicated in my pre-Council statement.
	The main points of the discussion were:
	Most member states agreed that the aim should be to adopt the new regulation before the expiration of the current regulation to avoid any gaps in consumer protection;
	Most member states would prefer a technology-neutral regulation that does not contain the technical details of the structural solutions to be adopted. Thus, any technical detail would be contained in BEREC guidance and subject to consultation with key stakeholders;
	Many member states were in favour of promoting the European approach to mobile roaming regulation within worldwide forums such as the ITU. However, the UK and others noted that Europe should strive to lead by example, rather than impose its approach on the world; and
	A number of member states stressed the importance of ensuring the establishment of effective competition within the EU roaming market before price caps are lifted.
	3. Proposal for a Regulation of the European Parliament and of the Council concerning the European Network and Information Security Agency (ENISA — Progress Report (EM 14358/10)
	This item was a progress report from the presidency (EM 14358/10). I did not intervene on this item and there were no substantive interventions from other member states.
	The Commission stated that it will publish a comprehensive internet security plan during 2012, the aim of which will be to: ensure that IT-related products and services are designed to survive cyber-attacks; and ensure that member states computer emergency response teams can exchange information more freely, thus allowing them to co-operate more effectively.
	4. Lunchtime discussion on the future of universal service in telecommunications, with regard to the communication of the European Commission presented in the end of November (EM  1 7466/11)
	The Council broke after the ENISA item for lunch. During the lunch, there was a debate on the issue of whether broadband should be added to the universal service directive, with debate framed by the three questions posed by the presidency as detailed in my pre-Council statement. This debate was prompted by the publication of the Communication from the Commission on the results of the public consultation on the role of the universal service obligation in electronic communications. (EM 17466/11)
	I intervened along the lines set out in my pre-Council statement. Member states generally welcomed the decision by the Commission to leave to them when to decide to introduce a universal service obligation that would include broadband.
	5. Communication from t he Commission on Net Neutrality — Adoption of Council conclusions (EM 9350/11).
	After lunch, the Council then considered the adoption of the Council conclusions that cover the recent communication entitled “The open internet and net neutrality in Europe”. (EM 9350/11). The conclusions were adopted without any substantive comment. However, I did intervene to highlight the self-regulatory initiative that UK stakeholders were engaged in.
	This concluded the formal substantive business items for Council. However, there were eight items that were taken under Any Other Business. They were:
	a) Digital agenda for Europe—information from the Commission (EM 9981/10).
	b) Ministerial conference on perspectives for the development of the electronic communications market in the EU (Warszawa 19-20 October 2011)—information from the presidency.
	c) Sixth ministerial conference e-govemment (Poznan 17-18 November)—information from the presidency.
	d) Communication from the Commission on the results of the public consultation on the role of the universal service obligation in electronic communications (EM 17466/11).
	e) Open data—an engine for innovation, growth and transparent governance—presentation by the Commission.
	f) Connecting Europe facility—proposal for a regulation of the European Parliament and of the Council on guidelines for trans-European networks and repealing Decision No. 1336/97/EC (EM 17176/11 and EM 16006/11)—presentation by the Commission.
	g) State of play on implementation of the electronics communication framework—information from the Commission.
	h) Work programme of the incoming presidency—information by the Danish delegation.
	My only intervention under AOB was on item a. I intervened as per my pre-Council statement by stating that the Commission should bring forward actions that lead to the creation of a true pan-European digital single market. Other member states including Denmark, Netherlands and Sweden also highlighted the importance of this issue during similar interventions.

DEFENCE

Armed Forces Covenant

Philip Hammond: Our armed forces make great sacrifices on the nation's behalf, not only on operations overseas, but in their service in the UK too. This Government recognise that the nation in turn has a responsibility properly to support them and their families. That is why the Armed Forces Act 2011 recognises the armed forces covenant in law for the first time, and creates an obligation on the Defence Secretary to publish an annual armed forces covenant report.
	The Government are today publishing an interim armed forces covenant annual report, in advance of the statutory requirement created by the Act. It has been compiled in consultation with the covenant reference group, which brings together officials from across Government with service charities and family federations. The interim report covers the full scope of the armed forces covenant, published on 16 May 2011, and provides a baseline for future statutory reports.
	On 16 May 2011 we also published “The Armed Forces Covenant: Today and Tomorrow”, copies of which are available in the Library of the House. This document outlines the commitments made by the Government in support of the covenant. In contrast, today’s interim report is focused on recording progress and a broad survey of areas of interest and concern. These include housing, education, health care and the operation of inquests, as the statutory armed forces covenant report will from next year. It also considers whether our service men and women are disadvantaged in their ability to access public services, or whether in any areas there is a case that special treatment is justified, and again the statutory report will do the same.
	Overall the report makes clear that while more can and will be done, much has been achieved since the coalition programme for government was published:
	We have doubled the tax free operational allowance so that those serving on eligible operations now receive a lump sum of just over £5,000 for a six-month tour;
	We have improved rest and recuperation leave for those on operations;
	We have endorsed the proposals by my hon. Friend the Member for South West Wiltshire (Dr Murrison), for making improvements in mental health care provision, the majority of which have been implemented fully, and the provision of enhanced prosthetic services for military amputees;
	We have delivered a scheme to provide scholarships to bereaved service children—to date a total of 22 further education and 61 higher education scholarships have been awarded for academic years 2010-11 and 2011-12;
	We have delivered more help for those leaving the service to go on to higher/further education—not least through payment of tuition fees, which has been extended to the spouses or partners taking up the entitlement because of bereavement or injury of a discharged service person;
	We have introduced the pupil premium for the children of those currently serving (£200 per child, rising to £250 next year), amounting to £9 million for 2011-12. In addition, we have made available £3 million per year for state schools with service children, including those of reservists. Since the launch of this fund, 139 bids from schools have been approved, amounting to £2.9 million for this financial year;
	We have announced a community covenant scheme supported by a £30 million community covenant fund. Over 20 councils have signed a covenant with the armed forces community in their areas, with more planned in the coming months. More than £750,000 has already been released to support local projects, with further bidding rounds taking place quarterly;
	We have doubled council tax relief for those on eligible operations overseas;
	We are working with credit reference agencies to ensure service people are not disadvantaged by mobility requirements in accessing credit.
	Recognising the key role played by the covenant reference group, the Government have committed themselves to publishing, alongside the annual report, any observations which the external members of the group might have on it. The external members have offered their observations on this interim report, and they are reproduced within it. They have drawn attention not only to the progress which has been made, but also to how much remains to be done. The Government welcome their constructive input and will take careful note of the points made. We are extremely grateful to them for their continued engagement and assistance, as we jointly take work forward on the armed forces covenant.
	The armed forces covenant is a matter for the whole of Government, and sustained progress requires both close collaboration across Whitehall and clear ministerial leadership. My right hon. Friends, the Prime Minister and Deputy Prime Minister, have therefore agreed to establish a new ministerial Committee, led by the Minister of State, Cabinet Office, the Minister with responsibility for Government policy, the right hon. Member for West Dorset (Mr Letwin) to oversee this work and ensure that momentum is maintained. The Prime Minister will chair the first meeting of this new Committee early next year. This new forum will work closely with the covenant reference group, whose key roles, including monitoring progress and holding the Government to account, will be unchanged. I will chair an annual joint meeting between the two bodies to ensure that the covenant reference group have the opportunity to engage with Ministers directly.

EDUCATION

Early Years Foundation Stage

Sarah Teather: I am today publishing the Government response to the consultation on the early years foundation stage (EYFS).
	The consultation has shown broad support for the Government’s proposals for a reformed EYFS, implementing the recommendations of Dame Clare Tickell’s independent review. The reforms will reduce paperwork and bureaucracy for professionals; focus attention on the areas most essential for children’s healthy development; support early intervention with children who face difficulties; and secure a stronger partnership with parents.
	The Government response confirms our plans, including simplified assessment at age five and a new progress check for children aged 24 to 36 months, focused on the most important areas of children’s development. We also set out how we propose to refine the early learning goals (in particular literacy and maths), and minor changes to the guidance on assessment at age five to ensure it is relevant to all children including those with special educational needs and disabilities.
	I am launching an additional one-month consultation on the EYFS early learning goals and educational programmes, and the relevant statutory instrument. This further consultation is required by the Childcare Act 2006.
	The new early years framework is an important element in our plans to ensure families in the foundation years are supported, to give children the best possible start in life, and ensure that all children have the knowledge and skills that provide the right foundation for their future progress through school and life. The revised EYFS statutory framework (and the associated regulations) will be published in spring, to enable schools and other providers to prepare for implementation of the new EYFS from September 2012.
	I have placed a copy of the Government response in the Libraries of both Houses.

Reform of the Teachers' Pension Scheme  (England and Wales)

Michael Gove: On 2 November the Chief Secretary to the Treasury made a statement to the House setting out an improved offer on public service pensions to public sector workers (Cm 8214). This offer provided a more generous cost ceiling for scheme-specific discussions to work within, and protected all those within 10 years of their pension age from any further change. This generous offer was conditional on the Government and trade unions reaching agreement by the end of the year, including in the teachers’ pension scheme, bringing to a conclusion talks that have lasted since February 2011.
	Since 2 November I have been engaged in detailed and intensive talks with the teacher and lecturer trade unions and employer representatives. I can now report to the House on the heads of agreement on the scheme design for the teachers’ pension scheme to be introduced in 2015, on which talks have concluded. The Government have made it clear this sets out their final position on the main elements of scheme design, which unions have agreed to take to their Executives as the outcome of negotiations on the main elements of scheme design. This includes a commitment to seek Executives’ agreement to the suspension of any industrial action on pension reform while the final details are being resolved. Further detailed work will take place in the new year and Executives will consult members as appropriate.
	The agreement includes changes to the Government’s reference scheme to reflect the priorities of the teaching profession in relation to early retirement and other issues, consistent with the need to remain within the Government’s overall cost ceiling.
	The agreement reached allows for further discussions on variations to the balance between the accrual rate and the career average revalued earnings revaluation factor within the limits of the Government’s cost ceiling.
	The core parameters of the new scheme are set out below:
	a. a pension scheme design based on career average;
	b. a provisional accrual rate of 1/57th of pensionable earnings each year, and the resolution of outstanding issues not covered by this agreement.
	c. revaluation of active members’ benefits in line with CPI + 1.6%.
	d. normal pension age equal to state pension age, which applies both to active members and deferred members (new scheme service only);
	e. pensions in payment to increase in line with prices index (currently CPI);
	f. benefits earned in deferment to increase in line with CPI;
	g. average member contributions of 9.6%, with some protection for the lowest paid;
	h. optional lump sum commutation at a rate of 12:1, in accordance with HMRC limits and regulations;
	i. spouses/partner pension in accordance with current provisions;
	j. lump sum on death in service of three times FTE salary;
	k. ill-health benefits the same as those in the current open scheme;
	l. actuarially fair early/late retirement factors on a cost-neutral basis except for those with a NPA above age 65, who will have early retirement factors of 3% per year for a maximum of three years in respect of the period from age 65 to their NPA; and
	m. an employer cost cap to provide backstop protection to the taxpayer against unforeseen costs and risks.
	The Government Actuary’s Department has confirmed that this scheme design does not exceed the cost ceiling set by the Government on 2 November. Copies of the heads of agreement and GAD verification have been deposited in the Libraries of both Houses.

ENVIRONMENT FOOD AND RURAL AFFAIRS

Canal and River Trust (Transfer Order)

Richard Benyon: On 12 September 2011, I launched a supplementary consultation on the detail of the order to transfer the functions of British Waterways (BW) in England and Wales to a new waterways charity, the Canal & River Trust (CRT). The consultation closed on 24 October 2011.
	Today, I am announcing the publication of the Government’s response to this consultation, which is available at http://www.defra.gov.uk/consult/closed/.
	The consultation asked for views on the detail of certain aspects of the transfer order. The majority of responses to the consultation supported the overall
	direction of the Government’s proposals, and, subject to obtaining parliamentary approval in due course, the Government intend to proceed as follows:
	We will remove the ministerial power to direct disposal of property under the Local Government, Planning and Land Act 1980, since it will not be needed by the CRT;
	We will not extend the provisions in the Transport Acts 1962 and 1968 on employment to the CRT, on the basis that they have largely been replaced by more recent employment legislation;
	We will amend sections 104 and 105 of the Transport Act 1968 to give the CRT an enhanced “statutory proposer” role in relation to ministerial orders on classification and maintenance of its waterways;
	We will amend section 27 of the Transport Act 1962 to restrict the power of direction to circumstances in the interests of national defence;
	We will not apply the House of Commons Disqualification Act 1975; Scottish Parliament (Disqualification) Order 2010; National Assembly for Wales (Disqualification) Order 2010 or the Northern Ireland Assembly Disqualification Act 1975 to the trustees of the CRT, because this would not be appropriate for trustees of a charitable body.
	In addition, the Government intend, also subject to parliamentary approval, to apply the Freedom of Information Act (FOIA) to the CRT, in respect of all those statutory functions that the CRT will inherit from BW through the proposed transfer order. This limited application of the FOIA will have the effect of excluding from the provisions of the Act those broader charitable functions carried out by the CRT. It will also exclude bodies that merge with the CRT, unless the FOIA already applies or is made to apply to them at the point of merger.
	Recognising that, as concerns administrative burdens, this will initially put CRT in a potentially disadvantageous position with regard to other statutory navigation authorities, the Government will, within two years, launch a procedure, under section 5 of the FOIA, to consider extending the provisions of the Act to other statutory navigation authorities, with the intention of creating a level playing field.
	In these circumstances, the Environmental Information Regulations (EIRs) may be considered to apply to the CRT to the extent that the CRT is carrying out “functions of public administration”. Ultimately, this will be a question for the courts to decide. In the meantime, I have asked the CRT trustees to make a public commitment to adopt a transparency policy that closely follows the provisions of the EIRs; we are seeking to capture this commitment in the funding agreement being negotiated between DEFRA and the CRT trustees.
	The Government’s response also includes, by agreement, the Scottish Government’s response to the Scottish issues raised in the consultation.

HEALTH

NHS Pension Scheme

Andrew Lansley: On 2 November the Chief Secretary to the Treasury made a statement to the House setting out an improved offer on public service pensions to public sector workers (Cm 8214). This offer provided a more generous cost
	ceiling for scheme-specific discussions to work within, and protected all those within 10 years of their pension age from any further change. This generous offer was conditional on the Government and trade unions reaching agreement by the end of the year, including in the NHS pension scheme, bringing to a conclusion talks that have lasted since February 2011.
	Since 2 November I have been engaged in detailed and intensive talks with the health trade unions and employer representatives. I can now report to the House on the heads of agreement on the scheme design for the NHS pension scheme to be reached in 2015, on which talks have concluded. The Government have made it clear this sets out their final position on the main elements of scheme design, which unions have agreed to take to their Executives as the best that can be achieved through negotiations. Further work on the remaining details will take place in the new year, and Executives will consult members as appropriate. This includes a commitment to suspend any further industrial action while the final details are resolved and unions are consulting their members.
	The main parameters of the new scheme are set out below:
	a. a pension scheme design based on career average ;
	b. a provisional accrual rate of l/54(th) of pensionable earnings each year, subject to further agreement on outstanding issues not covered by this agreement (see annex A);
	c. revaluation of active members’ benefits in line with CPI plus 1.5% per annum;
	d. a normal pension age equal to the state pension age, which applies both to active members and deferred members (new scheme service only). If a member’s SPA rises, then NPA will do so too for all post 2015 service. Those within 10 years of NPA are excluded and accrued rights will also be related to existing NPA;
	e. pensions in payment to increase in line with prices index (currently CPI);
	f. benefits to increase in any period of deferment in line with prices index (currently CPI);
	g. average member contributions of 9.8%, with tiered contributions. Member contributions in year 1 to increase between 0% and 2.4% in year 1. There will be no increase in year 1 for staff with WTE pensionable pay less than £26,557. There will be further discussions on contribution rates and increases in years 2 and 3;
	h. optional lump sum commutation at a rate of £12 of lump sum for every £1 per annum of pension foregone in accordance with HMRC limits and regulations;
	i. early/late retirement factors on an actuarially neutral basis;
	j. ill-health retirement pensions to be based on the current ill-health retirement arrangements but with enhancement for higher tier awards to be at the rate of 50% of prospective service to normal pension age;
	k. spouse and partner pensions to continue to be based on an accrual rate of 1/160(th). For deaths in retirement spouse and partner pensions will remain based on pre-commuted pension;
	l. an employer contribution cap as detailed in the heads of agreement.
	There will be transitional protection:
	all accrued rights are protected and those past benefits will be linked to final salary when members leave the scheme;
	all active NHS pension scheme members who as of 1 April 2012, have 10 years or less to their current pension age, including MHOs and members of the special classes will see no change in when they can retire, nor any decrease in the
	amount of pension they receive at their current normal pension age. This will be achieved by allowing such members to remain in their current arrangements until they retire (for 2008 members until they have taken all their 2008 pension benefits);
	members who are within a further 3.5 years of their normal pension age, ( i.e. up to 13.5 years from their NPA) will have limited protection with linear tapering so that for every month of age that they are beyond 10 years of their normal pension age, they lose two months of protection. At the end of the protected period, they will be transferred into the new pension arrangements; and
	the costs associated with the protection outlined above sit outside the costs of the reference scheme.
	On the basis that the scheme design within the heads of agreement is agreed, the Government agree to retain fair deal provision and extend access to public service pension schemes for transferring staff. This means that all staff whose employment is compulsorily transferred from the NHS under TUPE, including subsequent TUPE transfers, will still be able to retain membership of the NHS pension scheme when transferred. These arrangements will replace the current provisions for bulk transfers under fair deal, which will no longer apply. In addition, a partnership review of the implementation of the provisions set out in this paragraph for staff working in “Any Qualified Providers” (AQP) will be carried out.
	The Government Actuary’s Department has confirmed that this scheme design does not exceed the cost ceiling set by the Government on 2 November. Copies of the heads of agreement and GAD verification have been placed in the Library.

Public Health System

Andrew Lansley: Today I am publishing policy updates on the new public health system, covering local government’s new public health functions and the operating model for Public Health England (PHE). Subject to the passage of the Health and Social Care Bill, PHE will be established in April 2013.
	The Government have an ambitious programme to improve public health through strengthening local action, supporting self-esteem and behavioural changes, promoting healthy choices and changing the environment to support healthier lives.
	The updates define the Government’s plans, set out in the White Paper “Healthy Lives, Healthy People: Our strategy for public health in England”, in November 2010, to change the way public health is delivered nationally through establishing Public Health England as an executive agency and locally, through moving responsibility and accountability for public health to local government.
	These reforms will see local authorities taking the lead for improving health and co-ordinating local efforts to protect the public’s health and well-being, and ensuring health services effectively promote population health. Local political leadership will be central to making this work.
	In addition, a new executive agency, Public Health England will:
	deliver services: health protection, public health information and intelligence, and services for the public through social marketing and behavioural insight activities;
	lead for public health by encouraging transparency and accountability, building the evidence base, building relationships promoting public health; and
	support the development of the specialist and wider public health work force by appointing directors of public health with local authorities, supporting excellence in public health practice and bringing together the wider range of public health professionals.
	The NHS will continue to play a full role in providing care, tackling inequalities and ensuring every clinical contact counts.
	In “Healthy Lives, Health People: update and way forward”, published in July 2011, we included commissioning of termination of pregnancies as one of the areas for which local authorities will be responsible. I have now reflected further on whether it would be appropriate for local authorities to be responsible for commissioning procedures that will involve surgical procedures and the associated need for strong clinical governance arrangements to ensure people receive a safe, legal service. I therefore intend to consult on whether commissioning termination of pregnancies should in the longer term be the responsibility of clinical commissioning groups or local authorities. In the interim, as a practical measure, CCGs will be responsible for commissioning these services for April 2013.
	The update documents have been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office. The updates are also available at
	http://healthandcare.dh.gov.uk/category/public-health.

HOME DEPARTMENT

Rules of Engagement (HMIC Review of August 2011 Disorders)

Theresa May: On 15 August I wrote to ask Her Majesty’s chief inspector of constabulary, Sir Denis O’Connor, to undertake a review of public order policing and to consider further work to support clearer guidance to forces on the size of deployments, the need for mutual aid, pre-emptive action, public order tactics, the number of officers (including commanders) trained in public order policing and an appropriate arrests policy. I am pleased to be able to tell the House that HMIC has concluded its review and have today published its report, entitled “The Rules of Engagement: A Review of the August 2011 Disorders”.
	HMIC recognises that the events of August 2011 were
	“unparalleled in terms of speed, scale and geographical spread of disorder”.
	HMIC also recognises the achievements of the police in bringing the disorder under control and in particular, the individual acts of bravery displayed by police officers across the country.
	The report confirms that the initial response, in particular to the disorder which broke out in Tottenham, was too slow. This has been acknowledged in the interim reports released by the crime and victims panel and by the Metropolitan police themselves.
	This review makes a number of interrelated recommendations which will require careful and serious consideration by the Government and the police service working together. This work will be aligned with the development of the strategic policing requirement.
	The way in which the police respond to public disorder is a matter of key public interest. The August disturbances brought havoc to some of our cities and communities. HMIC has, in a short period of time, produced a wide-ranging and detailed report and this is to be commended. The report contains a significant amount of detail and evidence which will require detailed assessment by the Government and the police service as a whole.
	A copy of this report will be placed in Library of the House.

SCOTLAND

Energy Towing Vessels

Michael Moore: On 10 October 2011, I announced to the House that the Scotland Office would lead efforts to secure a long-term replacement for the emergency towing vessels (ETV) service in waters surrounding the Northern Isles and Western Isles. Extensive discussions have since taken place with a very wide range of interested parties, including senior representatives of the oil and shipping industries as well as public sector organisations.
	I am pleased to confirm that the north sea oil industry, led by Oil & Gas UK and its member companies, has indicated its willingness to offer support by establishing
	a call-off arrangement for their chartered vessels to be deployed in support of HM coastguard in the event of an emergency. Detailed work is under way between operators, vessel owners and the Maritime and Coastguard Agency on working practices and necessary protocols governing the arrangements. During the last meeting of the Scottish ETV working group, I discussed the matter in depth with Oil & Gas UK, local authorities and other interested parties who have responded positively to this proposal. With that in mind, I have instructed that work should proceed quickly with a view to putting a framework in place as early as possible in the new year.
	This is a very positive development offering additional reassurance to local communities, particularly those in the Northern Isles. This step also demonstrates active support by the oil industry for corporate social responsibility and I greatly welcome their helpful contribution and constructive engagement.
	The Government intend to use the remainder of the £3 million funding provided by the Department for Transport to maintain cover until no later than 31 March 2012. Further work will continue with local authorities along the west coast to examine all viable long-term options for those waters, and I will reconvene a further meeting of the working group early in the new year.